The entrepreneurial earnings puzzle: Mismeasurement or real?

• Autores: Thomas Åstebro, Jing Chen
• Localización: Journal of Business Venturing, ISSN-e 1873-2003, Vol. 29, Nº. 1, 2014, págs. 88-105
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • A review of recent evidence on relative earnings from entrepreneurship versus wage work presents a puzzle: why do individuals become entrepreneurs when entrepreneurs on average apparently earn less than employees? After considering several potential explanations, we empirically analyze one: income underreporting by entrepreneurs. Using a nationwide panel survey representing U.S. households over 15 years, we estimate that entrepreneurs on average earn 4% less per year than employees. However, after correcting for income underreporting, the mean financial gain to entrepreneurship is positive and large, greater than 42%. However, we show that this estimate is built on some unpalatable model assumptions.